hina’s National Development and Reform Commission (NDRC), the Ministry of Commerce and the Hainan provincial government issued on April 9 a document on loosening market access to the free trade zone in South China’s Hainan Province, hoping to further energize the market.
The document named the new measures “special,” which according to NDRC official Xu Shanchang, means they are tailored for Hainan’s free trade zone which has been under construction since 2020.
According to Xu, those “special measures” focus on five sectors, including medical care, culture, education, tourism and aerospace.
The government plans to promote internet medical care by establishing an electronic prescription center and supporting information sharing between different medical care organs, sales platforms and insurers while tightening supervision on high-risk medications.
Restrictions will be loosened on commercial aerospace enterprises to make Hainan an open and international aerospace center. Li Dongyu, deputy secretary general of Hainan provincial government said at the press conference that they will make Wenchang Satellite Launch Center into China’s first coastal low-latitude launch center capable of handling low-cost, large-diameter rockets.
Finance is a highlight of the document which proposes to improve the financial environment and support the development of the security, insurance and bond industries. Analysts believe those measures serve the orientation of the free trade zone in connecting to the international market with the same set of rules to reduce the cost of financial transactions.
Hainan’s free trade zone initiative started after Chinese President Xi Jinping delivered a speech during a 2018 visit to the southern island, inviting global investors to invest in Hainan and share the fruits of China’s reform and opening-up. Since then, Hainan has taken the lead in narrowing negative lists for investment and cutting taxes for enterprises and high-tech talents.
In June 2020, Hainan released a general plan on the construction of the free trade zone which focuses on facilitating trade, investment, transportation, data exchange and cross-border capital flows. At a press conference, Lin Nianxiu of the NDRC said “free trade” implied zero tariffs and broad access.
Despite the Covid-19 pandemic, Hainan’s import and export in 2020 reached 93.3 billion yuan (US$13.7b), according to official data, 3 percent more year-on-year, with private enterprises as the pillar of foreign trade. The same year, Hainan saw 3,753 new foreign trade enterprises registered, 403 percent growth year-on-year.
According to Jiang Chenghua, an official from the Ministry of Commerce, the new special measures further loosen the access restrictions based on the national negative list issued last year. Hainan has designed a series of innovative institutions to support broader access which will be promoted nationwide if they take effect as expected.
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